In a significant move to regulate e-commerce platforms involved in agricultural trade, the Karnataka Assembly has passed the Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Bill, 2025. This legislation brings e-commerce platforms like Amazon, BigBasket, and D-Mart under the purview of Agricultural Produce Market Committees (APMCs), ensuring they comply with local market regulations and pay cess on the sale of notified agricultural produce.

The amendment aims to prevent cess fraud and ensure transparency in business operations. E-commerce platforms must now obtain licenses to operate, and only licensed traders can register on these platforms. The bill defines an e-commerce platform as an online medium facilitating the sale of notified agricultural produce to licensed retail traders within the market area, strictly for consumer sales and not for resale or processing.

Key Provisions of the Bill

• Licensing Requirement: No e-commerce platform can be established without obtaining a license from the relevant authority. Licenses can be suspended if obtained through misrepresentation or fraud.
• Cess Payment: Platforms must pay cess to APMCs on the sale of notified agricultural produce, such as rice, wheat, fruits, vegetables, and flowers.
• Warehouse Service Providers: These providers are capped at charging a service fee of 5% for fruits, vegetables, and flowers, and 2% for other notified produce. They must ensure safe storage and provide insurance against natural calamities.

The new regulations will significantly impact how e-commerce platforms operate in Karnataka. They must now comply with APMC regulations, maintain electronic records of transactions, and resolve disputes within specified timelines. The Agricultural Marketing Director has been empowered to take action against platforms evading cess payments, with recent examples including Udaan being fined Rs 25 lakh for such evasion.

As e-commerce platforms adapt to these regulations, they face challenges in ensuring compliance while maintaining operational efficiency. The emphasis on transparency and fair trade practices is expected to benefit farmers and licensed traders by preventing cess fraud and ensuring that all stakeholders receive fair compensation for their produce.

Karnataka’s new law marks a significant step towards regulating e-commerce platforms involved in agricultural trade, ensuring compliance with local market regulations and protecting farmers’ interests. As the law comes into effect, it will be crucial for e-commerce companies to align their operations with these new requirements.

Key Highlights:

• Karnataka has passed a bill regulating e-commerce platforms trading in notified agricultural produce, requiring them to obtain licenses and pay cess to APMCs.
• The legislation aims to prevent cess fraud and ensure transparency in business operations, with provisions for dispute resolution and penalties for non-compliance.
• E-commerce platforms must maintain electronic transaction records and comply with service fee caps for warehouse service providers.
• The move is expected to benefit farmers and licensed traders by ensuring fair trade practices.